This week is all about taking the next step in tax reform. The market is hoping that the Senate will pass their version by the end of the week, and Congress took a step in that direction on Tuesday. The Senate Budget Committee narrowly voted to advance the bill to a full Senate vote. The major indices moved higher after the news and not even a North Korean missile launch could break its stride.
“It’s going to take a lot more than a missile test to derail this bull market,” said Dave Bartosiak in Surprise Trader and Momentum Trader. “With the tax bill heading for a vote on the Senate floor sometime this week, there is a growing sense of optimism on the street right now.”
After a flat session on Monday following the holiday weekend, each of the major indices sprung back to life on Tuesday and reached fresh all-time highs. The Dow jumped 1.09% to 23,836.7 and the S&P climbed 0.98% to 2627. The NASDAQ advanced 0.49% to 6912.4.
In the portfolios, Momentum Trader and Stocks Under $10 each added new positions, while Short List swapped out three names and cashed in on a double-digit winner. Learn more about today’s action in the highlights section below:
Today’s Portfolio Highlights:
Momentum Trader: The portfolio has been rewarded recently for chasing breakouts, and Dave sees no reason to fight against the current. Therefore, he bought a 12.5% allocation in Beacon Roofing (BECN), a “red hot” roofing materials company whose Zacks Consensus Estimate for this year has climbed to $3.08 from $2.60 in just the past month. BECN has been on a spending spree lately, acquiring five companies in the last year that has pumped an additional $130 million into revenues. Earnings estimates surged enough to make the stock a Zacks Rank #1 (Strong Buy). Read the complete commentary for more.
Stocks Under $10: Apparently, there’s been some confusion in the quarterly report for Forterra (FRTA). It was first reported as a big loss, but has since been corrected as a beat. Brian Bolan wants to capitalize on this confusion, so he added this pipemaker to the portfolio on Tuesday. The editor believes that the stock is moving higher and should see double digits in the next few weeks. Plus, as a construction play, he likes that FRTA will bring some diversification to the portfolio. Read the full write-up for more on this addition.
Zacks Short List: All three names that were short-covered in this week’s adjustment were positive, and one of them was also a double-digit winner. The stocks that left the portfolio include:
• Apache Corp (APA, +17.8%)
• Liberty Global (LBTYA, +1.6%)
• PTC Inc. (PTC, +1.2%)
The new buys that replaced these names are:
• Yandex (YNDX)
• Molina Healthcare (MOH)
• Sina Corp (SINA)
Learn more about this emotion-free portfolio that takes advantage of falling and volatile markets by reading the Short List Trader Guide.
Have a Good Evening,
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