Recommendation Changes Its Name as the Market Steadies

Nicholas Vardy

Nicholas Vardy has a unique background that has proven his knack for making money in different markets around the world.

The week ended on a positive note with the Dow Jones up 0.79%, the S&P 500 rising 0.78% and the NASDAQ up 0.83%.The MCSI Emerging Markets Index flatlined to end the week down 0.15%.

Big gainers in your Alpha Investor Letter portfolio included Skyworks Solutions Inc. (SWKS), which added 4.00%; the PureFunds ISE Cyber Security ETF (HACK), which climbed 3.27%; the iShares MSCI Philippines (EPHE), which jumped 3.21%; and Markel Corp. (MKL), which added 2.74%.

Illumina Inc. (ILMN) and the PureFunds ISE Cyber Security ETF (HACK) each hit a new 52-week high.

Several positions moved back above their 50-day moving averages to a BUY.

These include the Global X Guru Index ETF (GURU), Market Vectors Biotech ETF (BBH), First Trust US IPO ETF (FPX) and AdvisorShares TrimTabs Float Shrink ETF (TTFS).

This past week, Actavis plc (ACT) has closed on the acquisition of Allergan, Inc. (AGN) in a cash and equity transaction valued at approximately $70.5 billion. The combination creates one of the world’s top 10 pharmaceutical companies by sales revenue, with combined annual pro forma revenues of more than $23 billion expected in 2015. Actavis plc had announced that it would adopt Allergan’s corporate name and, for its global-branded pharmaceutical portfolio, will retain the Actavis name for select geographic regions and product portfolios, such as the generics business in the United States.

In terms of your investment in Actavis, the only difference is the change in name to Allergan, Inc. (AGN). You should see no change in the stock price or the number of shares you hold. Bank of America now has a $350 target price on the stock — over 17% upside from yesterday’s closing price.

Both U.S. and global markets endured a pullback in the past few weeks, and investor sentiment actually hit “extreme fear” by the measure of the CNN Money “Fear and Greed” Index. Despite a market that has held up relatively well, only 20% of investors like you surveyed by the American Association of Individual Investors are expecting higher prices over the next six months. Shockingly, this is the second-lowest reading since the bull market began.

Exclusive  Poor Data Eases Tapering Concerns, Boosts Stocks

Markets are oversold both from a technical and market sentiment standpoint. From a contrarian standpoint, this suggests that we should see a bounce in the markets over the next week. That said, we are in a weak time of the year, and any bounce will hardly signal a breakout to the upside in what has been a frustrating trading range for most of 2015. It remains a stock and sector picker’s market.

Portfolio Update

Vanguard Global ex-US Real Estate ETF (VNQI) added 0.59% last week. VNQI’s sister fund, Vanguard REIT ETF (VNQ), has a strong U.S. real estate weighting and trades at an expensive 39x price-to-forward earnings ratio. However, VNQI’s non-U.S. approach trades at a cheap 14x forward earnings ratio. With the threat of rising U.S. interest rates never far out of investors’ minds, VNQI remains an attractive investment. VNQI is currently a HOLD.

Global X Guru Index ETF (GURU) rose 0.82%. With the 2015 U.S. market nearly flat for the year, GURU’s gurus have managed to turn out a 3.67% gain. Coming off of a very recent 52-week high, GURU ended the week above the 50-day moving average (MA) to become a BUY.

Vanguard Russell 2000 Index ETF (VTWO) gained 1.52%. VTWO is a play on small caps and another 2015 market-beating fund in your portfolio. This position has been on a bull run for the past six weeks and now stands just below its 52-week high. VTWO remains a BUY.

Skyworks Solutions Inc. (SWKS) continued its winning ways to add another 4.00% last week. SWKS touched down to its 50-day MA one week ago — a rare occurrence when looking at the price history of this stock — and immediately jumped back up. Northland Securities reiterated its “Outperform” rating on SWKS last week and raised its price target to $115. SWKS remains a BUY.

Exclusive  Greek Drama Roils Global Stock Markets

Union Pacific Corporation (UNP) dipped 0.82%. Despite its underperformance so far this year, UNP occupies the number one spot for revenue among railroad stocks. UNP’s trailing-12-month revenue is $23.96 billion. This figure is roughly double the next three stocks on the listing, which report revenues of $10-$13 billion. UNP is a HOLD.

Google Inc. (GOOGL) rose 0.50%. News agencies have been buzzing lately about Twitter’s CEO, Dick Costolo, stepping down — or being ousted — due to stagnation at the company. However, of much greater interest to Google stock holders is the speculation that Google is now in a position to acquire Twitter. Should this acquisition occur, Google’s stock price could see significant appreciation — with one market guru even saying Google could go to $700. GOOGL is a HOLD.

iShares MSCI Philippines (EPHE) jumped 3.21% last week. Although EPHE has not performed well since joining the ranks of the Alpha Investor Letter portfolio, last week’s trading action could be a bottom for this exchange-traded fund (ETF). EPHE is a HOLD.

Illumina Inc. (ILMN) added 0.16%. After hitting another new 52-week high late last week, ILMN took a breather and traded sideways to close the week flat. ILMN is up more than 13% in just the past two months and the outlook remains positive. ILMN is a BUY.

PureFunds ISE Cyber Security ETF (HACK) climbed 3.27%. HACK continued its winning ways last week, bringing quick gains to your portfolio. As I outlined in last week’s newsletter, this ETF typically trades a bit more than 500,000 shares daily. However, with all the hype surrounding “hack attacks” lately, daily trading volumes have been spiking over the past two weeks, hitting the two and three million mark. HACK is a BUY.

Exclusive  The Global Bull Bets on the BRICs

Nicholas Vardy

Like This Article?
Now Get Our FREE Special Report:
Alternative Investing: Investing in Timber

Stock Investor editor Paul Dykewicz reveals why investing in timber may be one of the best long-term portfolio strategies you'll find today.

Get Access to the Report, 100% FREE


img
previous article

The explosion in connectedness has introduced the world to a new word in our vocabulary -- “cybercrime.”

PREMIUM SERVICES FOR INVESTORS

Dr. Mark Skousen

Named one of the "Top 20 Living Economists," Dr. Skousen is a professional economist, investment expert, university professor, and author of more than 25 books.

Product Details

LEARN MORE HERE

Bryan Perry

A former Wall Street financial advisor with three decades' experience, Bryan Perry focuses his efforts on high-yield income investing and quick-hitting options plays.

Product Details

LEARN MORE HERE

Jim Woods

Jim Woods has over 20 years of experience in the markets from working as a stockbroker,
financial journalist, and money manager. As well as a book author and regular contributor to
numerous investment websites, Jim is the editor of:

Product Details

LEARN MORE HERE

Bob Carlson

Bob Carlson provides independent, objective research covering all the financial issues of retirement and retirement planning. In addition, Bob serves as Chairman of the Board of Trustees of the Fairfax County (VA) Employees’ Retirement System, which has over $2.8 billion in assets.

Product Details

LEARN MORE HERE

Mike Turner

Mike Turner’s financial, mathematical, computer science and engineering background serves as the foundation for his disciplined, rules-based approach to trading. Mike’s three services include:

Product Details

LEARN MORE HERE

Hilary Kramer

Hilary Kramer is an investment analyst and portfolio manager with 30 years of experience on Wall Street. Since 2010, Hilary's financial publications have provided stock analysis and investment advice to her subscribers:

Product Details

LEARN MORE HERE

DividendInvestor.com

Used by financial advisors and individual investors all over the world, DividendInvestor.com is the premier provider and one-stop shop for dividend information and research.

Product Details

Popular tools include our proprietary Dividend Calendar, Dividend Calculator, Dividend Score Card, and many more.

LEARN MORE HERE