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Market Commentary
 
On Friday we got two key economic reports. GDP and Durable Goods. Unfortunately both were not good. Gross Domestic Product (GDP) for Q4 2016 came in far lower than analysts had expected at 1.9%. This is the first read, and obviously subject to revisions in subsequent reads. But it’s also a big leg down from the 3.5% produced in Q3. Consumer spending was down a half of 1%, while the price index rose 2.1% and consumption was up 2.5%.
But this 1.9% is a disappointment and below 2% growth overall. Durable Goods was also down, -0.4% compared to the +2% expected. This is a more volatile read traditionally, and last read we saw -4.8%. Ex-transportation was +0.5% and non-defense, ex-aircraft was +0.8%.

On the earnings front we are about a third of the way through the reporting season. Total earnings for the S&P 500 shows that of the 170 index members who have reported earnings are up +6.0% on +3.1% higher revenues, with 64.1% beating EPS estimates and 54.7% coming ahead of top-line expectations.

Sectors with strong growth and better than expected results include the Finance, Technology, Construction, Industrial Products, Basic Materials and Consumer Discretionary sectors. Positive surprises for all of these sectors are tracking above the S&P 500 index level.  
 

Featured Stock

FaceBook, Inc- FB – $132.18
Internet Service

Facebook Inc. operates a social networking website worldwide. The Company's products for users are free of charge and available on the web, mobile web, and mobile platforms, such as Android and iOS. Its website enables users to connect, share, discover, and communicate with each other. The Facebook Platform is a set of tools and application programming interfaces that developers can use to build social apps on Facebook or to integrate their
websites with Facebook. It offers products that enable advertisers and marketers to engage with its users. Facebook Inc. is headquartered in Menlo Park, California.

Target Price is $145.40

FATI® Market Cap Rankings
 

Market Cap 1 Mth 3 Mth 6 Mth 9 Mth 12 Mth RSR % Stocks Up % Stocks Dwn YTD Return
Nano Cap 0.0% 14.0% 15.0% 18.0% 41.0% 3 9.0% 21.0% 0.41%
Small Caps 1.0% 13.0% 10.0% 19.0% 37.0% 2 6.0% 25.0% 2.66%
Micro Caps 0.0% 13.0% 11.0% 16.0% 33.0% 2 9.0% 30.0% 0.95%
Mid Caps 1.0% 11.0% 8.0% 14.0% 30.0% 2 5.0% 27.0% 2.97%
Large Caps 2.0% 8.0% 6.0% 10.0% 22.0% 2 10.0% 26.0% 3.64%
Mega Caps 2.0% 5.0% 3.0% 6.0% 13.0% 1 12.0% 28.0% 3.22%
FATI® S&G Index                 2.37%

FATI® Sector Rankings
 

Ranking Sector 1 Mth 3 Mth 6 Mth 9 Mth 12 Mth RSR % Groups Up % Groups Dwn YTD Return
1 Transportation 4.0% 20.0% 22.0% 20.0% 44.0% 5 0.0% 0.0% 6.28%
2 Auto/Truck 2.0% 18.0% 21.0% 22.0% 49.0% 4 0.0% 0.0% 3.20%
3 Basic Material 5.0% 21.0% 18.0% 25.0% 74.0% 4 0.0% 0.0% 7.04%
4 Industrial Products 3.0% 16.0% 19.0% 25.0% 53.0% 4 0.0% 66.0% 4.91%
5 Computer & Technology 4.0% 13.0% 15.0% 26.0% 39.0% 4 0.0% 42.0% 4.31%
6 Finance 0.0% 14.0% 15.0% 18.0% 31.0% 3 0.0% 28.0% 2.16%
7 Construction 4.0% 20.0% 12.0% 25.0% 48.0% 3 0.0% 50.0% 5.66%
8 Oil & Energy 0.0% 10.0% 15.0% 15.0% 41.0% 2 0.0% 42.0% 1.50%
9 Aerospace 0.0% 11.0% 11.0% 14.0% 30.0% 2 0.0% 0.0% 1.22%
10 Multi-Conglomerates 0.0% 14.0% 8.0% 8.0% 32.0% 1 0.0% 0.0% 1.10%
11 Business Services -3.0% 14.0% 4.0% 12.0% 30.0% 1 0.0% 50.0% -3.27%
12 Consumer Discretionary 0.0% 8.0% 2.0% 7.0% 20.0% 0 0.0% 16.0% 0.91%
13 Medical 1.0% 8.0% 0.0% 5.0% 14.0% 0 33.0% 33.0% 2.49%
14 Consumer Staples 1.0% 4.0% -4.0% 2.0% 12.0% 0 16.0% 16.0% 2.37%
15 Utility 0.0% 2.0% -4.0% 2.0% 14.0% -1 0.0% 25.0% 0.67%
16 Retail/Wholesale -3.0% 5.0% 0.0% 0.0% 9.0% -1 0.0% 50.0% -2.88%
  FATI® S&G Index                 2.37%

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 27.66 28.42 10 17.9 N/A 2.56 20170421
        Mega Caps        
FB 1.69 203.58 279.87 12 29.22 $380,965 7.84 20170201
        Large Caps        
PGR 1.73 24.22 37.28 10 18.43 $22,036 8.41 20170413
KEY 1.23 17.64 33.63 12 14.01 $19,751 2.97 20170420
        Mid Caps        
ZION 2.76 20.95 41.94 13 17.92 $8,757 3.34 20170424
OZRK 2.39 19.38 40.7 5 18.26 $6,821 1.51 20170410
APO 2.35 114.28 158.51 7 10.3 $3,928 5.91 20170203
MKSI 1.49 59.73 82.58 5 18.75 $3,564 3.99 20170202

 

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 27.66 28.42 10 17.9 N/A 2.56 20170421
        Large Caps        
MJN -5.52 -1.91 8.65 6 21.36 $13,160 3.39 20170427
CMG -2.56 -41.33 -15.29 16 47.02 $12,060 12.75 20170202
        Mid Caps        
KEX -5.5 -47.5 -41.11 6 30.02 $3,565 14.78 20170201
AMC -28.76 -10.27 12.39 5 33.53 $3,313 23.43 20170306
        Small Caps        
GSM -17.06 -62.9 13.16 5 38.09 $1,846 75.49 N/A

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 Stock Performance
 

Rec. Date Ticker LONG / SHORT % G/L S&P 500 % +/- S&P 500 Current Price Target Price 8% Stop Price Next EPS Date
11/12/16 LFUS $149.20 5.70% 6.16% -0.46% $157.71 $164.12 $138.56 3/6/17
11/19/16 EA $78.99 5.39% 5.17% 0.22% $83.25 $86.89 $72.67 1/26/17
12/3/16 MCHP $62.05 10.85% 4.69% 6.16% $68.78 $68.25 $57.08 2/1/17
12/10/16 PCH $43.02 -5.04% 1.56% -6.60% $40.85 $47.32 $39.57 1/24/17
12/17116 FHN $19.65 4.83% 1.62% 3.21% $20.60 $21.62 $18.08 1/17/17
12/31/16 VNTV $59.62 5.72% 2.50% 3.22% $63.03 $65.58 $54.85 2/1/17
1/7/17 AMAT $32.04 -0.77% -0.77% 0.00% $35.15 $35.24 $29.48 2/17/17
1/14/17 BAC $23.01 1.91% -0.88% 2.79% $23.45 $26.00 $21.17 4/13/17
1/21/17 FSLR $34.75 9.70% -1.02% 10.72% $31.38 $31.28 $37.53 2/28/17
1/28/17 FB $132.18 0.00% 0.00% 0.00% $132.18 $145.40 $121.58 2/1/17