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Market Commentary

June 16th, 2018

Not much to say without being redundant this week. The earnings outlook for the balance of the year remains strong, so stock should rise more before year end. As for earnings revisions, they have tapered somewhat from the pace in first quarter where they got a real shot in the arm with the Tax Reform legislation.

Keep you eyes on sectors and industries when selecting stocks to purchase. Focus on stocks in industries with strong relative strength and stocks with good earnings and revisions over the past 30 days. These stocks are more than likely to outperform the market averages over the next couple of months. This has been the case this year. On the other side, keep a watch on stocks in your portfolio which miss earnings estimates. If it is a miss by a penny, it is not an issue. However, if they miss by 10% or more, re-evaluate the earnings outlook for the stock.

Featured Recommendation

Progressive Corporation  $62.36 (PGR)

The Progressive Corporation, through its subsidiaries, provides personal and commercial property-casualty insurance, and other specialty property-casualty insurance and related services primarily in the United States. Its Personal Lines segment writes insurance for personal autos, and recreational and other vehicles. This segment’s products include personal auto insurance; and special lines products, including insurance for motorcycles, ATVs, RVs, mobile homes, watercraft, and snowmobiles. The company’s Commercial Lines segment provides primary liability, physical damage, and other auto-related insurance for autos, vans, and pick-up trucks, and dump trucks used by small businesses; tractors, trailers, and straight trucks primarily used by regional general freight and expeditor-type businesses etc. Its Property segment provides residential property insurance for homeowners, other property owners, and renters, as well as offers personal umbrella insurance, and primary and excess flood insurance. 
 Target Price $68.60

FATI® Market Rankings

Ranking Market Cap 1 Mth 3 Mth 6 Mth 9 Mth 12 Mth RSR % Stocks Up % Stocks Dwn YTD Return
1 Micro Caps 2.0% 10.0% 16.0% 20.0% 28.0% 5 13.0% 21.0% 14.49%
2 Nano Caps 5.0% 9.0% 12.0% 18.0% 21.0% 5 14.0% 25.0% 8.98%
3 Small Caps 3.0% 8.0% 10.0% 12.0% 24.0% 4 11.0% 20.0% 9.45%
4 Mid Caps 2.0% 3.0% 5.0% 12.0% 15.0% 2 12.0% 24.0% 5.30%
5 Large Caps 1.0% 1.0% 2.0% 8.0% 12.0% 1 11.0% 24.0% 2.24%
6 Mega Caps 0.0% -1.0% 1.0% 5.0% 10.0% 0 19.0% 24.0% 0.42%
FATI® S&G Index 2.55%

FATI® Sector Rankings

Ranking Sector 1 Mth 3 Mth 6 Mth 9 Mth 12 Mth RSR % Groups Up % Groups Dwn YTD Return
1 Medical 5% 11% 22% 23% 31% 7 0.0% 33.0% 21.49%
2 Retail/Wholesale 8% 13% 13% 24% 22% 5 0.0% 0.0% 13.48%
3 Computer/Technology 4% 2% 7% 13% 17% 4 0.0% 42.0% 9.07%
4 Business Services 4% 2% 7% 12% 9% 4 0.0% 50.0% 3.12%
5 Consumer Discretionary 4% 6% 5% 12% 17% 3 16.0% 0.0% 5.13%
6 Industrial Products 0% 2% 8% 16% 18% 3 16.0% 33.0% 3.85%
7 Oil/Energy -6% 7% 6% 10% 15% 2 0.0% 42.0% 1.20%
8 Aerospace 0% 3% 7% 15% 26% 2 0.0% 0.0% 7.39%
9 Basic Material -1% 1% 6% 19% 30% 1 0.0% 0.0% 2.83%
10 Finance 1% 0% 0% 6% 6% 1 14.0% 42.0% 1.29%
11 Auto/Truck 1% 0% 0% 6% 6% 0 0.0% 100.0% -3.03%
13 Multi-Conglomerates 0% 0% -3% 2% 2% 0 0.0% 0.0% -3.25%
14 Transportation 0% -4% -2 5% 10% 0 0.0% 0.0% -3.43%
15 Consumer Staples 2% 0% -5% 2% -1% -1 16.0% 0.0% -5.17%
16 Construction 0% -2% -5% 10% 13% -1 0.0% 0.0% -6.86%
17 Utilities 0% 0% -6% -5% -3% -2 0.0% 0.0% -5.19%
FATI® S/G Index 2.55%

Long Trades

Ticker %Chg EPS F1 EPS Grth % F1 EPS Grth % F2 # Anlst in F1  Con. Est. P/E using  F1 Est Mkt Cap Millions FATI Score Next EPS Report Date
Market
SPX 0 24.49 33.32 1 17.93
Mega Cap
CVX 10.85 124.09 143.51 8 14.96 $236,948 9.87 20180727
COP 10.91 566.3 612.08 9 16.35 $76,476 11.67 20180726
Large Cap
PGR 5.28 59.22 59.28 8 14.89 $36,317 4.81 20180717
Mid Cap
URBN 9.14 49.05 62.17 13 18.38 $4,979 5.08 20180821
RH 13.05 116.87 140.11 9 24.32 $3,480 1.19 20180905
SAIC 3.32 25.21 32.13 6 18.16 $3,406 2.77 20180906
Small Cap
KMG 12.79 76.07 100 3 19.56 $1,212 3.19 20181015

Short Trades

Ticker %Chg EPS F1 EPS Grth % F1 EPS Grth % F2 # Anlst in F1  Con. Est. P/E using  F1 Est Mkt Cap Millions FATI Score Next EPS Report Date
Market
SPX 0 24.49 33.32 1 17.93
Large Cap
TRI -3.88 -73.39 -49.4 5 61.29 $29,135 7.13 20180807
Mid Cap
SMG -6.76 -2.79 18.87 4 22.6 $4,792 1.55 20180807
OLED -9.06 -25.43 40.49 5 51.85 $4,424 4.85 20180802

GREEN – Favored Stock
RED – EPS Report ALERT

FATI Score – Measures the dispersion of earnings estimates of analysts. The lower the score the the lower the earnings uncertainty. Scores of 12 or lower are only considered for long trades.

 

Recent Featured Recommendations

Rec. Date Ticker LONG / SHORT % G/L S&P 500 % +/- S&P 500 H/L Price Target Price 8% Stop Price Next EPS Date
1/5/18 MAS $44.46 -8.01% 1.40% -9.40% $40.90 $48.91 $40.90 2/8/18
1/12/18 RGA $163.65 -8.00% -0.15% -7.85% $150.56 $180.02 $150.56 1/29/18
1/19/18 HBAN $15.81 -8.03% 1.01% -9.04% $14.54 $17.39 $14.55 1/30/18
1/26/18 AIT $74.70 -8.01% 3.16% -11.17% $68.72 $82.17 $68.72 4/26/18
2/3/18 CI $204.46 -8.00% -0.72% -7.28% $188.10 $224.91 $188.10 5/4/18
2/10/18 MTH $45.00 13.33% 5.84% 7.49% $51.00 $49.50 $41.40 4/26/18
2/17/18 NSIT $35.42 44.78% 1.79% 42.99% $51.28 $38.96 $32.59 5/2/18
2/24/18 ARCB $33.05 52.65% 1.25% 51.40% $50.45 $36.36 $30.41 5/4/18
3/3/18 CR $91.86 -8.00% -3.26% -4.74% $84.51 $101.05 $84.51 4/23/18
3/10/18 KFY $49.59 37.81% 1.58% 36.23% $68.34 $54.55 $45.62 6/19/18
3/17/18 CBPX $27.75 17.48% -1.08% 18.56% $32.60 $30.53 $25.53 5/3/18
3/24/18 CVTI $31.26 -8.00% -6.96% -1.03% $28.76 $34.39 $28.76 4/19/18
3/31/18 XPO $101.81 13.44% -3.73% 17.17% $115.49 $127.04 $93.67 5/2/18
4/7/18 BCC $39.80 23.87% -6.38% 30.25% $49.30 $43.78 $36.62 5/2/18
4/14/18 PATK $56.65 13.33% -4.52% 17.85% $64.20 $62.32 $52.12 4/26/18
4/21/18 WTFC $91.02 9.82% -4.02% 13.84% $99.96 $100.12 $83.74 7/17/18
4/28/18 KLAC $102.18 16.03% -4.03% 20.06% $118.56 $112.40 $94.01 7/26/18
5/4/18 SNDR $26.94 13.29% -4.26% 17.55% $30.52 $29.63 $24.78 8/7/18
5/11/18 BP $45.83 4.36% -1.95% 6.32% $47.83 $50.41 $42.16 8/8/18
5/18/18 CAT $155.71 3.78% -2.48% 6.26% $161.60 $171.28 $143.25 7/28/18
5/24/18 BRKS $31.88 14.34% -2.18% 16.52% $36.45 $35.07 $29.33 8/1/18
6/2/18 MOMO $49.60 9.35% -1.70% 11.06% $54.24 $54.56 $45.63 8/28/18
6/9/18 GIII $49.02 1.65% -0.11% 1.76% $49.83 $53.92 $45.10 9/5/18
6/16/18 PRG $62.36 0.00% 0.00% 0.00% $62.36 $68.60 $57.37 7/17/18

YELLOW – Target Attained