Today, Keith Richards and Larry Berman CFA, CMT, CTA commented about whether CASH, FFH-T, XLP-N, PPL-T, CELG-Q, PONY-T, GIB.A-T, MGM-N, SOX-I, IQ-Q, FTS-T, CR-T, MRU-T, TV-T, BNS-T, SMG-N, LYG-N, ARX-T, ZID-T, XLP-N, ZLB-T, MSFT-Q, XGD-T, MDLZ-Q, HBM-T, ZJO-T, ZWU-T, HHL-T, MFC-T, SU-T, ZWC-T are stocks to buy or sell.
It is a summer play and often is. The sector broke down quite a bit. It is a trade and will get into the $55 area. It is a bit of a contrarian play. It is bouncing off the oversold level. You don't want to be involved in it for too long. It is not in an uptrend. The sector itself has its own challenges and so he will likely be in it only until October or November.
Educational Segment. How to assess revenue and earnings outlook. The market is going put trade issues in the rear view mirror. Revenue and earnings growth are going to be spectacular this quarter. He always likes to look at revenue growth as a qualifier to earnings gains. Buy-backs boost earnings per share. About 50% of revenues come from foreign companies so US$ currency is a factor. Energy, Tech and Materials should be the top sectors for revenue growth during FY 2018 as well as Q2/18. If the markets don't make new highs over the next 2 to 3 months then the tops are in in the markets.
He remembers when it was down in the low-$20's--when he bought it--and today it's at $53. It's in the Cloud, the software side. They got into hyperconverged infrastructure that allows the hardware in the Cloud's data centres to be updated. This stock has worked our well for him. He has a price target of $68. He wouldn't buy more here, but wait until it falls to the high-$40's.
He owned it, but they disappointed in earnings. He made some money on this (then bought Twitter). So...he recommends Twitter instead. Twitter has 336 million active users after purging a large portion of fake accounts and bots. Some investors were suspicious of this, but he sees this is an opportunity. Twitter has a very long runway--he's very bullish.
It was in a down trend but the worst may be over. Don't buy in the middle of a consolidation. Buy on a positive breakout. If you hold it then see what happens.